PORTLAND, Maine — After a year of continued decreases in regular gasoline prices at the pump, private sector and federal forecasters expect that 2016 will trend lower still.
Prices are projected to go up this summer before dipping again, but forecasts from the gas price tracking site GasBuddy and the U.S. Energy Information Administration project the annual average price for 2016 will drop below 2015’s national average of $2.40 per gallon.
That comes with a variety of caveats, including rising political tensions with major oil-producing countries, weather and the impact of December 2015’s lifting of a 40-year ban on crude oil exports from the U.S.
Analysts with GasBuddy noted those concerns in forecasting prices for 2016, when they projected the national average per-gallon price would dip another 12 cents, to $2.28.
Gregg Laskoski, a senior petroleum analyst with GasBuddy, said in a statement that “there are always some unforeseeable surprises,” but that the company is “confident” that 2016 will yield net savings at the pump for drivers.
The projection for a lower price aligns with forecasts from the U.S. Energy Information Administration, which in a short-term energy outlook in early December projected national retail prices to fall to $2.36 per gallon in 2016.
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That average comes largely from a forecast for a less dramatic price increase during peak summer travel months, aided by gasoline reserves that are at the highest levels in years.
But the EIA notes the long period of low prices is likely to start having a significant impact on domestic output in the latter half of 2016.
“Reductions in 2015 cash flows and capital expenditures have prompted companies to defer or redirect investment away from marginal exploration and research drilling to focus on core areas of major tight oil plays,” the administration said. “Reduced investment has resulted in the lowest count of oil-directed rigs in five years and in well completions that are significantly lower than 2014 levels.”
The EIA reported that the count of domestic oil rigs in operation dropped by about 60 percent by the end of 2015, compared with the count in October 2014. Monthly crude oil production began dropping in May 2015, but still outpaced average daily production for 2014.
Both GasBuddy and the EIA had underestimated the declines in gas prices through 2015, with the EIA at this time last year projecting the annual average would hold at $2.60 per gallon for the year. GasBuddy had forecast the national average would drop to about $2.64.
The actual average for last year was $2.40 per gallon, closing at a low of $1.99 per gallon nationally as of Thursday. The average price in Maine was about $2.10 and about $2.06 in the Bangor area, according to surveys by AAA.
Those winter prices are typically the lowest of the year, when travel demand is low and refineries are able to put out a less expensive winter blend.
Federal air quality standards require production of a lower-emission fuel in the summer months, which generally leads to a slight bump in prices starting in the spring.
For the year ahead, GasBuddy’s forecast notes gas taxes at the state level are another variable. No serious discussions of raising Maine’s gas tax are expected during the legislative session that opened Wednesday.
At the federal level, however, the report makes the political prediction that “we can almost guarantee that the federal gas tax will not be raised in an election year.”
Other factors in the forecast include any unforeseen refinery or production issues as well as shipping delays or damage to infrastructure caused by weather, currency fluctuations and the cost of credit.
Crude oil pricing is the single largest component that factors into what drivers pay at the pump, followed by federal and state taxes, refining costs and profits and distribution and marketing.
The price of crude oil made up about 65 percent of the final pump price in 2014, according to the EIA. The price of crude oil, in turn, is largely determined by the Organization of the Petroleum Exporting Countries, or OPEC, an export cartel that produced about 42 percent of the world’s oil in the years from 2000 to 2014.
OPEC has held oil production at high levels despite falling prices, losing two thirds of their value in the past 18 months, according to Reuters.
The news service reported Tuesday that the Saudi execution of a Shiite cleric, along with 46 others, has made more distant the possibility of a deal at OPEC to cut production in order to lift the global price of crude oil anytime soon.
Sandy Fielden, a director of energy analytics at RBN Energy, told Reuters in December that until that global price comes up, it’s unlikely that U.S. producers will start diverting much of their oil toward newly opened export markets.